The People’s Bank of China (PBOC, central) announced today that it will maintain its reference interest rate at 3.65%, intact since the reduction of five basis points carried out in August.
In the monthly update released on its website, the institution indicated that the reference rate for credits (LPR) will remain at its current level until at least within a month.
This indicator, established as a reference for interest rates in 2019, serves to set the price of new loans – generally, for companies – and variable interest loans that are pending repayment.
Its calculation is carried out from the price contributions of a number of banks – including small lenders that tend to have higher financing costs and greater exposure to non-performing loans – and aims to lower borrowing costs and support the “real economy”.
For its part, the LPR to five years or more – the reference for mortgage loans – also did not register changes to remain at 4.3% after also experiencing its last cut in August, in its case of 15 basis points.
The PBOC thus meets the forecasts of analysts, who anticipated that, as in November, this month there would be no movement in China’s main interest rates.